Nature's Care heads for IPO and hires new CEO from Swisse

The third-largest player in Australia's vitamins market, Nature's Care, is set to embark on a $800 million-plus initial public offering in early 2018 and has appointed a highly experienced executive from rival Swisse Wellness to run the company as it heads towards the ASX.

Nature's Care is owned by Sydney's Wu family and has appointed Tom Coleman as chief executive. Mr Coleman was the chief financial officer for Swisse, and earlier in his career was acting chief financial officer for department store group Myer.

The Wu family is in advanced discussions with investment bank UBS, which is the front runner to handle the process, but no official appointment has been made.

Australia's No.3 vitamins company, Nature's Care, is headed to an IPO on the ASX in 2018 and has hired a new CEO from rival Swisse.
Peter Riches

Nature's Care managing director Michael Wu said on Monday Mr Coleman would begin as chief executive on December 12. The company has also hired Scott Shaw as general sales manager, who previously worked for Blackmores and Pharmacare.

Next phase

Related Quotes

Advertisement

Mr Wu said the two appointments "will provide a strengthened management team to lead us into 2018 as we look towards a potential initial public offering, and the next phase in Nature's Care journey".

Mr Wu is a son of owners and founders Jina and Alex Wu.

Nature's Care ran a trade sale process in late 2016 but in December of that year decided against selling of the business. Long-serving Nature's Care general manager Steven Collett has recently left the business.

Mr Wu said production capacity at the company's fully owned manufacturing site at Belrose in Sydney's northern beaches region had more than doubled. The company's Healthy Care brand of vitamins had been growing faster than any other major Australian vitamins brand, Mr Wu said.

Healthy Care is sold through the Chemist Warehouse superstore chain.

Popular in China

Nature's Care also produces the higher-end Nature's Care Pro-Series range that is increasingly popular in China with its distinctive black labels on the packaging. It also makes the Vitamore vitamins brand sold through Coles supermarkets, and Vitaustralia, sold in Woolworths.

About 50 per cent of Nature's Care sales now come from overseas, the bulk of them in China.

Advertisement

The company won't comment on the specific rate of sales growth it has been achieving, but during the trade sale process in 2016 the annual sales revenue was running about $230 million.

The planned IPO on the ASX comes at a time when there is renewed momentum in the vitamins sector, with ASX-listed company and market leader Blackmores having doubled its share price since August to beyond $160.

The soaring appetite from Chinese consumers for big brands in Australian vitamins from 2014 stemmed from the "clean and green" high-quality reputation they had built up and led to a big price being paid for the Swisse business in late 2015.

Chinese company Biostime International, which this year changed its name to Health and Happiness, paid $1.7 billion for Swisse in a two-step acquisition at the height of the vitamins frenzy. Blackmores shares in January 2016 hit a record $220.

Health and Happiness in its latest operational update for the nine months to September 30, 2017, said revenue from the vitamins and nutritional supplements business, which is largely the Swisse operations, were up 23.3 per cent compared with the same period last year. "The increase was mainly attributed to the sales growth in Australia, while active sales in China continued to grow rapidly," chairman Luo Fei said.

The vitamins companies did fall out of favour in late 2016 and early 2017 because of regulatory uncertainty in China. This put some of the big-selling entrepreneurs, known as daigou traders who sell online in China, in a difficult spot, as they backed off buying up big volumes of vitamins from Australian supermarkets and chemists, triggering inventory issues and a slowdown in growth rates.

Topics

Simon Evans writes on business specialising in retail, mining, manufacturing. Based in our Adelaide newsroom, Simon has reported on business for The Australian Financial Review for more than 12 years. Connect with Simon on Twitter. Email Simon at simon.evans@afr.com.au